[23.08.2ÎÎ3] New Kyrgyz Labor Code Nears Completion

The Kyrgyz Republic is soon expected to adopt a new code that will bring the country's labor regulations closer to EU law. The TCA talked to Hugh O'Neill, who is advising the Kyrgyz government on drafting and implementation of the code on behalf of the EU, to find out what this will mean for workers and businesses.

The main objective of the Labor Code is to increase direct investment, create a decent business climate, and eliminate bureaucracy. In February, O'Neill prepared a report with suggestions on how to comply with EU law, some of which have been adopted.

"The code does its best to comply with EU law but certain rights would cost too much, or would require fundamental social change. In particular, it concentrates on health and safety, but includes few of the EU's equality and discrimination provisions," said O'Neill. "In the EU there are four essential elements of labor policy: health, safety, dignity and welfare. It's a pity there was not more emphasis on the dignity of the worker in the workplace."

He considers there are also areas where more could have been done for employers: "It's a very substantial step from the planned economy, but it is still not completely compliant with the demands of the market economy. The Code is a big step in that direction but the Soviet mentality is still strong."

Greater flexibility would help businesses struggling to adapt to the demands of the market economy. "If the Kyrgyz Republic is to develop into a market economy it must allow flexibility for employers to run their businesses without interference providing they meet health and safety standards. This means minimum bureaucracy," said O'Neill. "This will require a considerable change of attitude on the part of all sectors of society - the code is a step in that direction."

Chiefly, employers are concerned that they will need a substantial lead time to comply with its provisions, and that compliance will be expensive. For instance, if someone dies in an accident at work they would receive compensation equal to 20 times their annual salary. "This is exceptionally generous by west European standards, not to mention the US, and it is not known if it has been costed properly, to evaluate the consequences of a major industrial accident," said O'Neill. "As the ultimate guarantor of workers' compensation, the government could find this extremely costly if a company cannot afford to pay."

There will be a second reading of the law on labor protection in September, which the President signed on 1 August. The Code should come into effect within 6 months of the law's adoption by the government.

Before it enters into force, O'Neill warns that the government must set up a trusted enforcement system that will provide both workers and employers with speedy, impartial justice. Equally important is an information campaign to explain people's rights and obligations under the 400-Article Code: "In the past it has been difficult to get copies of legislation, and people were not informed."